Samsung is experiencing troubles with its supply chain. They are currently behind schedule in the production of the 5nm chips.
The Coronavirus pandemic is causing the world’s biggest businesses so much trouble. Calendar schedules are pushed back indefinitely because of the uncertainty of the situation. Samsung’s chip production business falls as another victim of the virus.
Back in January, Samsung announced that its factory in Korea should be ready for the production of its own 5nm chipsets. Back then, they seemed positive that by June of 2020, they will already be able to fulfill orders from their biggest customers.
Samsung’s big plan
The company wants its chipset production company to be the world’s biggest manufacturer by 2030. Due to the COVID-19 pandemic, this might not be the case.
Presently, there are only two companies in the world, competing in chipset manufacturing. The bigger one being Taiwan Semiconductor Manufacturing Company (TSMC), and the second one being Samsung.
The leader in the business has a huge advantage against Samsung. TSMC prepared earlier than Samsung in the 5nm chipset production. As such, they were able to purchase the necessary machines to kickstart the production.
— WikiChip (@WikiChip) July 28, 2019
Extreme Ultraviolet (EUV) Exposure Equipment delay
The EUV is the machine responsible for the production of the new and smaller chipsets. Presently, it only ASML that can make these machines. They ship their products all the way from the Netherlands.
The delay in Samsung‘s manufacturing is because of this original problem of importation. Due to the Coronavirus disease, the importation of the new machines was halted.
Both companies are scrambling to have these machines imported from the Netherlands. The signs point to the Dutch company prioritizing the orders of TSMC over Samsung’s. Last year, TSMC accounted for 51% of the Dutch company’s business.
Nevertheless, both companies will still see huge dents in their cash flow because of this importation delay.
Production roadmap push back
Originally, Samsung intended to start production in June. There’s no doubt that there will be a push back in the production plans of the company. Assuming that the importation and exportation ban is lifted by June, it won’t be until 2021 when the company starts mass production.
The normal timeline for the installation takes up to two months. Several months are needed for the entire production line to stabilize. While Samsung is busy with planning for the 5nm chips that will only start its production next year, its competitor is already well on its way to manufacture the 3nm chipsets in 2021.
Image courtesy of Unsplash/ Brian Kostiuk